Sony Vs The Second-Hand Market – Second Opinion

Here at The Lolocaust we have a simple code of ethics. Simply put, anyone can write a blog post from their perspective. There is no site line to pull, opinion is vital and we encourage all contributors and staff to work in this way. Earlier today my good buddy Duff wrote a rather good blog post about the rumoured Single-Use Retail system that Sony may or may not be implementing in the PS4. He argued fairly that while this is simply conjecture and speculation at this point, there is still a discussion to be had. He took the stance – and hopefully you’ll have read it already – that it was harmful in many ways, but perhaps inevitable. Which got me thinking.

As someone who has worked in gaming writing for over a decade, been gaming for almost two and a half decades and worked in game retail for years I felt it worth throwing my penny into the pot. Who knows, perhaps between us we can inspire further discussion on the subject. Either way, here is my take on the situation.

Hosted at Universal Videogame List www.uvlist.netThe first home computer my family owned – and by owned I mean, was sat in my bedroom – in any really functional manner was the Sinclair Spectrum. (We had owned an Acorn Electron before that, but it was bought too early to be used properly and my over-riding memory of it is sitting on the lounge carpet playing this game called Frankenstein 2000 that essentially took the plot of the Fantastic Voyage and set it inside Frankenstein’s monster. Curing him of ails such as frog in the throat.) I spent almost five years with the Speccy and while I bought a new game every fortnight from the chemist on the way home from my Nan’s house – usually a Ricochet Label title – the vast majority of my game collection was copied onto a C90 by a friend. I had dozens of copied games and thought nothing of it. It may not have killed off the console, but it was no different to the R4DS style carts that diverted so much money away from the Nintendo DS (or if you think like me, sold a hell of a lot more DS consoles for Nintendo).

The issue of piracy is a moral one more than a legal one, for me at least. Do I want to be taking money away from a development team? Can I say I love the industry while actively enjoying a product for gratis? The pre-owned video games market is now the new ‘big bad’ of the industry, cited in many explainations as to why Studio X has closed, or why Game Z stopped mid-development. To a point it is a problem that needs a solution.

For the last five years we have witnessed the industry attempt to balance out the way that consumers purchase their games, tackling the pre-owned market with ever more expensive downloadable content – or ‘Game Enhancing Content’ as many would prefer you look at it as – as well as single use access passes, which limit access to certain aspects of a game if you are not the original purchaser.

Now it would be folly to expect any industry to sit idly as a third party reaps the majority of the financial gain to be had from the game, be it from pre-owned sales or sharing with friends, and let’s be honest we’ve all come to respect the decision – mostly – to attempt to monetise that second/third/fourth sale. Why shouldn’t they? I don’t like it when a developer creates a fuss around the second hand gaming market, while also having every opportunity out there to grab a piece of pie. Naturally it would be better if the product we buy from the shops is the ‘complete’ package. No on-disk DLC to be unlocked later, no content held back to add an extra fiver to the profit pool and no on-line restrictions that impede the complete enjoyment of the product, but what is the compromise?

The RRP of a general new release sits around forty pounds, of which usually about £6 makes it to the original development team. Over the last couple of years we have seen a boom in indie companies doing well, releasing their games digitally. The big game makers have less flexibility here. A small two man team can often make do with steady sales. A large studio needs a success to pay the staff, retain the staff and create new and exciting products for gamers to enjoy. So why not limit the pre-owned market? Get that first sale on EVERY sale.

Well the argument often trawled out – and Duff touched upon it in his report – is that game retail, be it high street retailer or on-line super sites; indie stores or eBay makes a lot of their money from the second hand games market. It’s not surprising really. Items bought in at a set price, then sold at a higher price, that allows for a margin to be made. It fills a shop with stock and it ensures availability of titles that may have been withdrawn from retail as part of a brand protection move* while also encouraging trade-in customers to spend their trade credit/cash in-store on other items.

Now take this option away.

If the arguments are to be believed, every shop would immediately close down.

But would they?

If you can’t but a game second hand, do you not buy it at all? Of course not, unless it has a prohibitive price tag.

You see the price tag is based upon a dated concept of what a AAA title is worth, hell I remember Street Fighter II: SCE on the Mega Drive costing my Mum £45 way back when, take inflation into account and games of today are far cheaper, but they are comparable in a visual sense. We expect a new release to cost £39.99. When they launch titles at £25 of below we jump on it like it’s some crazy mistake, but essentially that lower price tag still generates a healthy profit, while the full whack price point is often retained to balance out the sales lost from brand new to trade in titles.

I work for a national chain of entertainment retailers and in my experience we see this happen on average:

  • New game launches. Pre-orders and early sales peak on the Sunday.
  • By the Wednesday of the following week – or five days later, depending on launch day – we start to see the flow of trade-ins begin**
  • The shift in sale then sits that we will often sell 3:1 in favour of second hand gaming, and this continues until the brand new copies are cheaper, either over time or as part of a subsidised program.

So take out the trade game sales, and shift the RRP to a lower price point and then what it the issue with not being able to sell it second hand? The retailers don’t want to be buying games in if they can still make healthy margins on brand new releases, and we as gamers always prefer the frantic opening of cellophane instead of the cautious, cursory check of the disk that was previously owned by someone else. Why did they trade it? Did they manage to scratch it in a subtle place. Why would they trade it in so soon? Why would anyone prefer a second hand game over new? It all comes down to price AND availability.

Now, in regards to the next generation of consoles we are looking at two distinct possibilities (if you believe the rumours)

  1. 1) Consoles will be digital only – which will negate the pre-owned market AND potentially the retail sector
  2. 2) Consoles may have a digitil tag system to link a game to a specific profile/system.

Now what do both of these potential situations represent? They represent a weighted benefit to the original publishers, distributors and manufacturers.

And I ask again, why not?

Do we not want a vibrant and buoyant situation for the games industry? Would we rather see another great video game crash? Doubtful.

What we want is quality games, affordable prices and easy availability.

Availability is the biggest issue, for me. If I pop into Tesco to grab some soap – just plucking a product out of the air there, feel free to imagine me buying something funnier if you prefer – I often pop down the game aisle just to have a look at pricing and offers. Ultimately the selection on offer in any supermarket falls into two categories, Chart and Cheap Chart. Try picking up a copy of Catherine, Pokemon Typing Adventure of Earth Defence Force and you’ll be coming home with your soap (or funnier thought up item) and a sense of bitter resentment. When GAME hit the rocks Tesco publicly declared themselves the home of gamers. Well, you might well be Mr. Tesco, but first and foremost you are a home of a crap selection of wildly priced items. Even the pre-owned section in my local GAME store is mostly Guitar Hero/FIFA/generic shooters and little else. The best stuff – as explained to me by one motor-mouth employee – is always put aside by staff and then stuck on eBay. Charming. I remember buying Dreamcast games from that store, hell I bought a Dreamcast console, and a Neo Geo Pocket. Now I have to visit a museum to see one in town, or find some niche indie retro store that uses eBay pricing systems as a bench mark. Pre-owned can throw out some gems, at low prices, but ultimately these titles are hard to find because they simply weren’t made in any great number. Better sales prospects and no pre-owned market may tempt some publishers to be more confident, more bold.

Wouldn’t we all want that?

Sure the days of borrowing a game from a friend might be nearly over, but hell, with on-line components, sofa gaming and the fact that more and more people are gaming than ever before – be it on console, PC or tablet – I’m certain that any pre-owned block would not be the end of the world. It exists already – DC Universe Online was a single use disk – and there is nothing wrong with an industry seeking a way to protect itself.

Obviously my argument falls flat IF prices don’t drop. If the ludicrous prices that games are sold for digitally on SEN/XBLM translate into strong-armed retail prices. But I don’t think that would happen, in all honesty THAT would be a killing blow for retail and the industry as a whole.

* Brand protection essentially works like this. Publisher – let’s use Sega as an example – has a dozen games released on a platform. Many of these titles will have been released early in the console cycle and as such may represent a lesser quality or, more often, a cheaper price. Ultimately if you are going to bring out a new release, you don’t want your name all over the bargain bins of Britain. It makes more sense to recall stock, or shift it quickly. This happens quite often, but can cause great games to disappear into the ether.

** Obviously you always get the occasional ‘same-day’ person who will strive to finish a game in a day just so that they can pop back, trade it in and act all smug. Or dismissive. Or critical.

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